new Delhi: In the year ending 2017, after the successful initial public offering of five insurance companies (IPOs) in the new year, more insurance companies are expected to knock in the primary capital market. This year, five companies in the insurance sector, including two government insurance companies, raised about 45,000 crore from the market. Apart from flooding of IPO in 2018, the mergers and acquisitions of companies in the insurance sector can also be seen. This year, HDFC Standard Life Insurance’s offer to merge with Max Life and Max Financial Services was hanging, which could be completed in the new year. Tapan Singhal, CEO of Bajaj Allianz General Assurance Company told PTI that in the recent times some integration has started in the insurance sector. It is expected to continue even further.
He said that the speed in the insurance industry is showing and it is estimated to be in the coming years. This provides more opportunities for integration because some promoters can shake off non-core business and reputed major insurance companies want to leverage the market.
In order to raise the capital, ICICI Lombard was the first company to raise Rs 5,700 crore this year through the IPO. Insurance company GICRi tops Rs 11,176 crore, New India Assurance Company Rs 9,467 crore, HDFC Standard Life Insurance Rs 8,695 crore, SBI Life Insurance Company raises Rs 8,386 crore
In other government insurance companies, the National Insurance Company, the Oriental Insurance Company and the United India Insurance Company – are also in the process of getting into the capital market. Antoine Jacob, CEO of Apollo Munich Health Insurance, said that the insurance sector is moving very fast, especially the health insurance segment. He said that technical-based ideas have changed the nature of this business.
All segments with new products are increasing rapidly and distribution mechanism is being expanded. This trend will continue, and insurance companies will focus on technical-based ideas. Jacob said that note-taking and GST affect business and economic growth in the short term. After the stability of the economy, the speed will return again. He said, “With the improvement in the sector, newcomer companies will come up with new products. This will further increase the competition in the market.